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EXHIBIT 2
EXECUTION COPY
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is made and entered into
as of May 14, 1999, among Silicon Bandwidth, Inc., a Delaware corporation
("Purchaser"), each undersigned shareholder ("Shareholder") of The Panda
Project, Inc., a corporation existing under the laws of Florida ("Seller"), and
Seller.
RECITALS
WHEREAS, pursuant to a letter of agreement dated as of even date
herewith, by and between Purchaser and Seller (such agreement as it may be
amended or restated is hereinafter referred to as the "Letter Agreement"), the
parties agreed that on the signing of the Letter Agreement, Purchaser and each
Shareholder would execute and deliver a Voting Agreement containing the terms
and conditions set forth in the Letter Agreement together with such other terms
and conditions as may be agreed to by the parties to the Letter Agreement acting
reasonably;
WHEREAS, a special committee of the board of directors of Seller
has determined that the transactions contemplated by the Letter Agreement are
fair to, and in the best interests of, the shareholders of Seller and has
approved such transactions;
WHEREAS, Purchaser has agreed to acquire substantially all of the
assets of Seller (the "Acquisition") in exchange for common stock of Purchaser
("Purchaser Common Stock") and the assumption of certain Seller liabilities by
Purchaser;
WHEREAS, in order to induce Purchaser to consummate the
Acquisition, Seller has agreed to use its best efforts to solicit the proxy of
certain shareholders of Seller on behalf of Purchaser, and to cause certain
shareholders of Seller to execute and deliver voting agreements to Purchaser;
WHEREAS, each Shareholder is the registered and beneficial owner
of at least such number of (i) shares of the outstanding capital stock of Seller
as is indicated on the signature page of this Agreement (the "Shares") and/or
(ii) securities convertible into or exercisable for shares of capital stock of
Seller as indicated on the signature page of the Agreement (the "Share
Equivalents");
WHEREAS, Helix (PEI), Inc. ("Helix") is an undersigned
Shareholder and holder of a security interest in certain assets of Seller (the
"Security Interest"); and
WHEREAS, in order to induce Purchaser to consummate the
Acquisition, Helix and Seller have agreed to renegotiate the terms of the
Security Interest.
NOW, THEREFORE, the parties agree as follows:
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1. Share Ownership and Agreement to Retain Shares.
1.1 Transfer and Encumbrance.
(a) Purchaser acknowledges and agrees that, subject
to Section 1.2 hereof, this Agreement only pertains to the number of Shares and
Share Equivalents indicated on the signature page and that Shareholder may be
the beneficial owner of Shares and Share Equivalents which are not subject to
this Agreement.
(b) Each Shareholder is the beneficial owner of
that number of Shares and Share Equivalents set forth opposite such
Shareholder's name on the signature page hereto and, except as otherwise set
forth on the signature page hereto, has held such Shares and Share Equivalents
at all times since the date set forth on such signature page. No other person or
entity not a signatory to this Agreement has a beneficial interest in or a right
to acquire such Shares or Share Equivalents or any portion of such Shares or
Share Equivalents. The Shares and Share Equivalents are and will be at all times
up until the Expiration Date free and clear of any liens, claims, options,
charges or other encumbrances.
(c) Each Shareholder agrees not to transfer (except
as may be specifically required by this Agreement, court order or by operation
of law), sell, exchange, pledge or otherwise dispose of or encumber the Shares,
Share Equivalents or any New Shares (as defined below), or to make any offer or
agreement relating thereto, at any time prior to the Expiration Date. As used
herein, the term "Expiration Date" shall mean the earlier to occur of (i) the
Closing Date (as defined in the Letter Agreement) of the Acquisition, and (ii)
six months after the date of the termination of the Letter Agreement.
1.2 New Shares. Each Shareholder agrees that to the extent
necessary to achieve approval of such matters (if it is described in Section
(a)(i) or rejection of such matters described in Section 2(a)(ii)) shares of
capital stock of Seller that such Shareholder purchases or with respect to which
such Shareholder otherwise acquires beneficial ownership after the date of this
Agreement and prior to the Expiration Date ("New Shares") (such New Shares to
exclude an aggregate of 1,057,471 shares of Common Stock of Seller to be issued
to AGR Halifax Fund, Ltd., Leonardo, L.P., GAM Arbitrage Investments, Inc., AG
Super Fund International Partners, L.P., Raphael, L.P. and Ramius Fund, L.P.
upon the conversion of 27.6 shares of Series A Preferred Stock of Seller) shall
be subject to the terms and conditions of this Agreement to the same extent as
if they constituted Shares.
2. Agreements Regarding Shares and Share Equivalents.
(a) Prior to the Expiration Date, at every meeting
of the shareholders of Seller called with respect to any of the following, and
at every adjournment thereof, and on every action or approval by written
resolution of the shareholders of Seller with respect to any of the following,
each Shareholder shall vote the Shares and any New Shares (i) in favor of
approval of the Acquisition and any matter that could reasonably be expected to
facilitate the Acquisition and (ii) against any proposal for any
recapitalization, merger, sale of assets or other business combination (other
than the Acquisition) between Seller and any person or entity other than
Purchaser.
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(b) Prior to the record date set for the first
shareholders meeting relating to any matter covered by Section 2(a) above, each
undersigned holder of Share Equivalents shall exercise or convert such number of
Share Equivalents, as the case may be, into capital stock of Seller, pro rata in
the amount determined by Purchaser to be necessary to achieve approval of such
matters (if it is described in Section 2(a)(i)) or rejection of such matters (if
it is described in Section 2(a)(ii)), and vote such shares as set forth in
Section 2(a) above.
3. Irrevocable Proxy. Each Shareholder is hereby delivering to
Purchaser a duly executed proxy in the form attached hereto as Exhibit 1 (the
"Proxy") with respect to each meeting of shareholders of Seller, such Proxy to
cover the total number of Shares and New Shares in respect of which each
Shareholder is entitled to vote at any such meeting. Upon the execution of this
Agreement by each Shareholder, each Shareholder hereby revokes any and all prior
proxies given by it with respect to the Shares and agrees not to grant any
subsequent proxies with respect to the Shares or any New Shares until after the
Expiration Date.
4. Agreements Regarding Security Interest.
(a) Prior to the record date set for the first
shareholders meeting relating to any matter covered by Section 3(a) above,
Seller and Helix shall enter into an agreement to restructure the indebtedness
of Seller (the "Secured Debt") currently secured by Helix's security interest in
certain assets of Seller in the form attached hereto as Exhibit 2 (the
"Restructuring Agreement"), and effective as of the Closing Seller and Helix
shall effectuate such restructuring.
(b) The Restructuring Agreement shall provide that
(i) Helix shall release its security interest in all assets of Seller other than
its intellectual property assets and (ii) the terms of the Secured Debt shall be
modified so that (A) the Secured Debt accrues interest after the Closing at a
rate of 6% per annum, calculated on a monthly basis, (B) any interest accrued
with respect to the Secured Debt prior to the Closing is forgiven by Helix and
(C) the Secured Debt shall be subject to (x) a principal payment obligation of
$1,000,000 immediately after the Closing and (y) principal and interest payments
aggregating $100,000 per month on each of the monthly anniversaries of the
Closing (and such lesser amount on the eleventh monthly anniversary of the
Closing as shall satisfy all remaining principal and interest on the Secured
Debt).
5. Representations and Warranties of Shareholder. Each
Shareholder hereby represents and warrants to Purchaser as follows: (a) such
Shareholder has all requisite power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby; (b) this Agreement has
been duly authorized, executed and delivered by such Shareholder and constitutes
a valid and binding obligation of such Shareholder enforceable against such
Shareholder in accordance with its terms; (c) if such Shareholder is a natural
person and is married, and the Shares constitute community property or otherwise
need spousal or other approval for this Agreement to be legal, valid and
binding, this Agreement has been duly authorized, executed and delivered by, and
constitutes a valid and binding agreement of, such Shareholder's spouse,
enforceable against such spouse in accordance with its terms, and (d) no trust
of which such Shareholder is a trustee requires the consent of any beneficiary
to the
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execution and delivery of this Agreement or to the consummation of the
transactions contemplated hereby.
6. Additional Documents. Each Shareholder hereby covenants and
agrees to execute and deliver any additional documents reasonably required for
the consummation of the Acquisition or to carry out the purpose and intent of
this Agreement.
7. Consent and Waiver. Each Shareholder hereby gives any consents
or waivers that are reasonably required for the consummation of the Acquisition
under the terms of any agreement to which such Shareholder is a party or
pursuant to any rights such Shareholder may have.
8. Termination. This Agreement and the Proxy delivered in
connection herewith shall terminate and shall have no further force or effect as
of the Expiration Date.
9. Miscellaneous.
9.1 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
9.2 Binding Effect and Assignment. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
either of the parties without the prior written consent of the other. This
Agreement is intended to bind each Shareholder as a shareholder of Seller only
with respect to the specific matters set forth herein.
9.3 Amendment and Modification. This Agreement may not be
modified, amended, altered or supplemented except by the execution and delivery
of a written agreement executed by the parties hereto.
9.4 Specific Performance; Injunctive Relief. The parties
hereto acknowledge that Purchaser will be irreparably harmed and that there will
be no adequate remedy at law for a violation of any of the covenants or
agreements of each Shareholder set forth herein. Therefore, it is agreed that,
in addition to any other remedies that may be available to Purchaser upon any
such violation, Purchaser shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to Purchaser at law or in equity and each Shareholder hereby waives
any and all defenses which could exist in its favor in connection with such
enforcement and waives any requirement for the security or posting of any bond
in connection with such enforcement.
9.5 Notices. All notices, requests, demands or other
communications that are required or may be given pursuant to the terms of this
Voting Agreement shall be in writing and shall be deemed to have been duly given
upon receipt by delivery in person, by
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telecopy or facsimile, by registered or certified mail or by a nationally
recognized courier service to the respective parties as follows:
(a) If to a Shareholder, at the address set forth
below such Shareholder's signature at the end hereof.
(b) if to Purchaser, to:
Silicon Bandwidth, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
Xxx Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
(c) if to Seller, to:
The Panda Project
000 Xxxxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000
with a copy to:
5300 First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
or to such other address as any party hereto may designate for itself by notice
given as herein provided.
9.6 Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of New York,
except to the extent mandatorily governed by the laws of the State of Florida.
9.7 Entire Agreement. This Agreement and the Proxy contain
the entire understanding of the parties in respect of the subject matter hereof,
and supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
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9.8 Counterpart. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
9.9 Effect of Headings. The section headings herein are
for convenience only and shall not affect the construction or interpretation of
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Voting Agreement to be
executed as of the date first above written.
SILICON BANDWIDTH, INC. SHAREHOLDER
By:
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(Signature)
Name:
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(Print Name)
Title:
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(Print Address)
THE PANDA PROJECT, INC.
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(Print Address)
By:
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(Print Telephone Number)
Name:
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Title:
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(Social Security or Tax I.D. Number)
Total Number of Shares and Share Equivalents owned on the date hereof:
Common Stock:
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Series A Preferred Stock:
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(Print type of Share Equivalents) (Number of Share Equivalents)
[SIGNATURE PAGE TO VOTING AGREEMENT]
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